E-commerce battlefield 2022: Shopee visits 5 times more than Lazada, all of them are constantly losing money and risk losing revenue to TikTok Shop

The Vietnam Startup Ecosystem Report 2022 released recently by Nextrans said that, compared with the other 5 fastest growing Southeast Asian countries, the size of Vietnam’s e-commerce market (GMV) South in 2015 was the most modest market with only 0.4 billion USD.

However, the country’s e-commerce market size is expected to reach $32 billion (GMV) by 2025, recording a compound annual growth rate of up to 31.7% between 2022 and 2025. This number will make Vietnam the country with the fastest e-commerce growth in the region.

In terms of e-commerce revenue, total revenue in Vietnam is estimated at 14 billion USD in 2022 with a compound annual growth rate of 15% in the period 2018 – 2022. The strong CAGR in the period 2022 – 2025 (31.7%) shows the growth potential of the industry.

Value of deals decreased due to global crisis

The value of investment deals for Vietnamese e-commerce enterprises was announced at 161.6 million USD . In terms of deal volume, Vietnamese e-commerce startups have received a total of 17 investments , accounting for 14% of fintech deals in Southeast Asia.

Nextrans Vietnam Venture Fund said that compared to the context of e-commerce in 2021, the capital flow in 2022 has decreased significantly because investment activities are affected by the economic recession and this sector has experienced through the “hyped” period after the pandemic. While a large amount of capital flows into traditional e-commerce in 2021 (such as an investment of 410 million USD in VinCommerce and 278 million USD in Tiki), in 2022, the investment value is somewhat modest but many deals pour in. growing segments. It is a positive signal that this sector still has a lot of room for development.

The pace of funding slows as 2 of the 4 big startups – Shopee and Lazada have been backed by regional giants and are closer to maturity. The focus of the deals disclosed in 2022 belongs to Concung and Onpoint Ecommerce, with investment capital of $90 million and $50 million, respectively. Meanwhile, 2022 also saw two undisclosed deals with key domestic players – Tiki and Sendo. These startups have continuously raised capital in recent years with the aim of finding potential backup sources, underpinning growth and capturing a larger market share. This is essential for companies for IPO plans.

From the investors’ side, Vietnam’s e-commerce sector is developing to an attractive stage when a new wave of e-commerce support tools emerges. As the market matures, there will be more and more companies offering e-commerce niche products. Successful fundraising rounds by Rino, Aemi Beauty, EQUO and Piktina are prime examples.

Ranking of e-commerce websites

The majority of the e-commerce market share still belongs to the longtime players in the traditional e-commerce segment. In 2022, Shopee is the most popular e-commerce site in Vietnam based on average monthly traffic, with about 84.5 million visits per month.

Following respectively are two representatives of the MWG ecosystem – The Gioi Di Dong with an average of 54.03 million visits/month and Dien May Xanh with 20.82 million visits/month.

Lazada ranked fourth with 16.79 million visits/month, 1/5 of Shopee and 1/3 of Mobile World. Tiki ranked last in the top 5 when it only attracted 15.07 million visits/month. Sendo ranked 10th with 3.24 million visits/month.

However, all the major players in traditional e-commerce face huge capital loss and remain unprofitable for a long time, due to burning money to grow at all costs. In the face of losses, Tiki and Sendo have to raise capital continuously to get better support, while big companies that are backed and under less pressure like Shopee have not made any noticeable moves, only increasing fees. commission for local sellers.

TikTok Shop threatens big brothers

While traditional e-commerce still dominates, social media platforms show signs of accelerating. Most commonly used social media platform – TikTok launched TikTok Shop in Vietnam this year to drive sales through live streaming.

TikTok Shop also allows users to complete transactions inside the app instead of clicking on associated links. Technically, that means markets like Shopee and Lazada lose revenue. In Vietnam, TikTok Shop GMV is close to Lazada by 2022, becoming one of the three main players in this field.

In addition to TikTok Shop, local social e-commerce platforms such as Selly and Mio App are targeting the niche market and have many growth opportunities.